Colorado’s new HB19-1267 law went into effect on January 1, 2020, making it a felony offense to engage in wage theft. Before the law’s passage, employers alleged to have paid workers less than the federal minimum wage per hour faced a misdemeanor charge. To increase the penalties and punishment, lawmakers passed House Bill 19-1267 to classify the offense as a felony.

Lawmakers determined that human trafficking often took advantage of an underpaid labor force that included workers inaccurately classified as independent contractors. While numerous contractors agree to work on a per-project or piece-work basis amounting to less than the minimum wage per hour, the new law intends to prevent the misclassification of actual employees as contractors.

According to the Employers Council, workers in the Centennial State allegedly experience theft of wages and benefits worth hundreds of millions of dollars each year. The implied wrongdoing associated with unpaid wages is that an employer is also engaged in tax evasion or workers’ compensation fraud. The state’s associated loss in revenue reaches tens of millions of dollars, according to estimates.

Wage issues leading to criminal charges

Under HB19-1267, employers who intentionally fail to pay their employees the minimum wage or any owed wages may face a felony charge when the amount is worth at least $2,000. If convicted, punishment for a felony may include up to five years of incarceration and a fine.

In addition to elevating wage theft to a felony offense, the law removes the exemption for a company not paying owed wages after a bankruptcy protection filing. Colorado employers can no longer seek an exemption from paying wages after filing for bankruptcy.

Proof that a worker is not an employee

Providing evidence that an individual is an independent contractor rather than a hired employee may act as a strong defense against a felony wage-theft charge. A contract detailing payment terms and showing that a company does not have an employer-employee relationship with an individual may serve to avoid issues leading to charges.